Correlation Between HATTON NATIONAL and Ceylon Beverage
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By analyzing existing cross correlation between HATTON NATIONAL BANK and Ceylon Beverage Holdings, you can compare the effects of market volatilities on HATTON NATIONAL and Ceylon Beverage and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HATTON NATIONAL with a short position of Ceylon Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of HATTON NATIONAL and Ceylon Beverage.
Diversification Opportunities for HATTON NATIONAL and Ceylon Beverage
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HATTON and Ceylon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding HATTON NATIONAL BANK and Ceylon Beverage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Beverage Holdings and HATTON NATIONAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HATTON NATIONAL BANK are associated (or correlated) with Ceylon Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Beverage Holdings has no effect on the direction of HATTON NATIONAL i.e., HATTON NATIONAL and Ceylon Beverage go up and down completely randomly.
Pair Corralation between HATTON NATIONAL and Ceylon Beverage
Assuming the 90 days trading horizon HATTON NATIONAL BANK is expected to under-perform the Ceylon Beverage. But the stock apears to be less risky and, when comparing its historical volatility, HATTON NATIONAL BANK is 1.15 times less risky than Ceylon Beverage. The stock trades about -0.21 of its potential returns per unit of risk. The Ceylon Beverage Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 272,850 in Ceylon Beverage Holdings on December 1, 2024 and sell it today you would lose (2,850) from holding Ceylon Beverage Holdings or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
HATTON NATIONAL BANK vs. Ceylon Beverage Holdings
Performance |
| Timeline |
| HATTON NATIONAL BANK |
| Ceylon Beverage Holdings |
HATTON NATIONAL and Ceylon Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HATTON NATIONAL and Ceylon Beverage
The main advantage of trading using opposite HATTON NATIONAL and Ceylon Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HATTON NATIONAL position performs unexpectedly, Ceylon Beverage can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ceylon Beverage will offset losses from the drop in Ceylon Beverage's long position.| HATTON NATIONAL vs. Peoples Insurance PLC | HATTON NATIONAL vs. Sanasa Development Bank | HATTON NATIONAL vs. Amana Bank | HATTON NATIONAL vs. SEYLAN BANK PLC |
| Ceylon Beverage vs. Prime Lands Residencies | Ceylon Beverage vs. Jat Holdings PLC | Ceylon Beverage vs. Lanka Credit and | Ceylon Beverage vs. VIDULLANKA PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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